The behavioral counter-revolution

Vernon Smith has always asked great questions. In this case the questions he asks constitute a challenge to the behavioral revolution. This is a challenge which he has beenmaking for many years, most pointedly his challenges to the interpretation of experimental evidence by psychologists (Smith, 1991, 2003, 2007). The questions that he asks here are, he stresses, also old questions. In effect the behavioral revolution in recent years has served to remind the economics profession that it simply forgot to answer many of the questions that it should have been answering all along with our traditional tools. In other words, we did not need a behavioral revolution: we just needed to do our job better as experimental economists. In that sense, I see his questions and proposed answers as counter revolutionary. The questions that are posed fall into two groups. The first group revolves around purported successes of economic theory in the experimental laboratory. The second, larger group revolves around purported failures of economic theory in the laboratory.